IMPACT OF COVID-19

ON EMPLOYMENT IN INDIA
MADE BY

ARUSHI BHASIN
(2020ECO5002)
PREET KUNWAR SINGH
(2019ECO1009)
RISHABH DEV SHARMA
(2019ECO1095)

 ABSTRACT
The present pandemic caused by COVID-19 has caused unprecedented turmoil in human
lives. Invoking the typology of crises, we classify COVID-19 as an intractable crisis that
necessitated nations to impose lockdowns. At the end of April 2020, the number of COVID-
19 infections had exceeded 2.8 million cases worldwide, with the death toll nearing 195,000.
The pandemic has now affected 210 countries and territories. Full or partial lockdown
measures were implemented all around the world, affecting more than 5 billion people.
Unemployment is like a giraffe which is easier to make out than to describe. The
unemployment crisis has existed for a long time. Due to the COVID-19 led lockdowns in
India, there has been a devastating effect on the unemployment rate in India as most of the
private companies have fired their employees. The main sufferers of this lockdown are the
informal sector employees as the majority of them started losing jobs since construction
works were closed. With no capital, thousands of people deserted cities, marching to their
homelands for several hundreds of miles away in the absence of government
transportation, which showed their intensity of anguish. This work is an attempt to describe
the impact of COVID-19 on unemployment in India and to decipher how intrinsically wrong
the policies are as well as the whole structure. Further, the most affected areas in terms of
unemployment emerged to be travel and tourism, hospitality, the entire corporate sector,
industrial and manufacturing sectors amongst others. On the contrary, as the lockdown
gradually started to loosen up, there were some sectors such as e-commerce, retail, IT and
the financial sector which saw increased hiring.
Along with that, an important part of the workers’ community is the migrant workers who
constitute quite a large proportion of such a vulnerable population. Millions of migrant
workers were left unemployed in India due to the lockdown and subsequent fear of
recession.
Moving towards informal workers, we see that India has one of the highest numbers of
informal workers in the world, estimated to be around 75 to 90% of all workers. Informal
workers have been facing substantial economic losses due to the pandemic and subsequent
lockdowns. The overall performance of our economy depends on both the labour and
employment markets. The overall performance of the economy depends on both the labour
and employment markets. Recently, the rating agency Moody’s slashed its FY22 growth rate
in India to 9.3% from the earlier estimation of 13.7%.

All this burden of unemployment on one hand and meeting daily needs on the other often
leads to an increase in the amount of crime. Throughout history, unemployment and crime
in a society have had a certain correlation. This correlation has again emerged during and
post this pandemic. As the Indian economy slowed down and gradually moved into
recession, crimes of all kinds rose significantly. This has thus acted as evidence to the
economic slowdown and the widespread unemployment among most sectors. A
comprehensive analysis and these findings have been further elaborated in the report.

 OBJECTIVE
The most serious problem the country is facing today is the problem of unemployment, the
planners and every other stakeholder have shown much concern about this and emphasis to
remove unemployment by increasing the growth rate has been cited. Although India is
ranked among, the first eight industrially advanced countries in the world, it remains by and
large, underdeveloped. But, as soon as ray of hope was emerging, the world got hit by
COVID 19. The novel coronavirus pandemic is considered a natural crisis, which extremely
affects human psychology. Thus, the aim of this study is to analyze the IMPACT OF COVID-
19 ON EMPLOYMENT IN INDIA. The pandemic has had a very significant effect on the
already existing unemployment crisis and this study tries to bring out those effects as
effectively as possible.

 OVERVIEW
The majority of the working population in the country belonged to the informal,
unorganized sector that had the lowest income jobs. India has millions of migrant workers
who move seasonally for prospective labor-intensive jobs that offer better pay than local
employment. With no restriction on internal migration within the country, supported by the
vast road and rail infrastructure many workers commute across districts for employment,
sometimes even on daily basis.

The organized sector, however, included workers employed at government offices or

government-owned entities, state-owned enterprises, and the private sector. Regular jobs
in the organized sector provided better job security and earnings, besides being protected
by labor laws. Employment and retirement benefits included rent subsidies and medical
allowances in addition to others, depending on the sector of work. Indian Railways and
Indian Armed forces are among the largest employers in the world. However, a majority of
the working labor are casual laborers and self-employed. To provide equal representation of
disadvantaged sections in society in education, employment, and politics, the government
has included reservations.

The country’s lockdown from the coronavirus (COVID-19) pandemic in March 2020 not only
halted daily life, but also had a drastic impact on most economic activities, causing financial
stress on many migrants and daily wage employees. A drop in India’s GDP forecasts as a
result of COVID-19 accompanies a drop in industrial production due to decreased factory
output in non-operational factories across the country. Business and commercial activities
came to a standstill, and many lost their jobs. Amidst this work-from-home became the new
norm for many professionals. This made it clear that along with the economy, the pandemic
created immediate and long-term disruption in employment, with all sections of society at
stake

 INTRODUCTION
To begin with, let’s first understand a simple definition and a few types of unemployment
important in the Indian context.
 What is Unemployment?
Unemployment occurs when a person who is actively searching for employment is unable to
find work. Unemployment is often used as a measure of the health of the economy. The
most frequent measure of unemployment is the unemployment rate, which is the number
of unemployed people divided by the number of people in the labor force.

 Types of Unemployment in India:

Disguised Unemployment: It is a phenomenon wherein more people are employed than
actually needed. It is primarily traced in the agricultural and the unorganized sectors of
India.
Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the
year. Agricultural laborers in India rarely have work throughout the year.
Structural Unemployment: It is a category of unemployment arising from the mismatch
between the jobs available in the market and the skills of the available workers in the
market. Many people in India do not get job due to lack of requisite skills and due to poor
education level, it becomes difficult to train them.
Cyclical Unemployment: It is result of the business cycle, where unemployment rises during
recessions and declines with economic growth. Cyclical unemployment figures in India are
negligible. It is a phenomenon that is mostly found in capitalist economies.
Technological Unemployment: It is loss of jobs due to changes in technology. In 2016,
World Bank data predicted that the proportion of jobs threatened by automation in India is
69% year-on-year.
Frictional Unemployment: The Frictional Unemployment also called as Search
Unemployment, refers to the time lag between the jobs when an individual is searching for
a new job or is switching between the jobs.
Vulnerable Employment: This means, people working informally, without proper job
contracts and thus sans any legal protection. These persons are deemed ‘unemployed’ since
records of their work are never maintained. It is one of the main types of unemployment in
India. Social distancing resulted in the job losses, specifically those Indian society’s lower
economic strata. Several households terminated domestic help services – essentially an
unorganized monthly-paying job.

 Unemployment Trend
India's unemployment rate rose to 23.5 per cent in the month of April amid
coronavirus lockdown. The rate of unemployment in urban India stood higher at 24.95 per
cent as against rural 22.89 per cent. The lockdown had forced many industries to shut
down which led to increased levels of unemployment across the country. Unemployment
rate dropped to 11 per cent in June 2020 from a record peak of 23.5 per cent in the previous
two months, when several companies resumed operations following weeks of corona virus
pandemic closures. The unemployment rate in metropolitan areas fell to 12.0 per cent from
25.8 per cent, while in rural areas it declined to 10.5 per cent from 22.5 per cent. This
condition had contributed to a loss of buying power in people's pockets. Without jobs or
low-paying jobs and low farm prices, people just didn't have the money to buy things.
This decreased demand and, in effect, also impacted the factory output and services
market.

 Impact of COVID-19 on Employment in India

According to Centre for Monitoring Indian Economy (CMIE);

 The trickle-down effect Between February and April 2020, the share of households that
experienced a fall in income shot up to nearly 46 percent.

 Nearly half of formal salaried workers moved into informal work, either as self-
employed (30 per cent), casual wage (10 per cent) or informal salaried (9 per cent)
workers, between late 2019 and late 2020 and there was a decline in their income level
as well.
 Small traders and laborers were most impacted by the coronavirus (COVID-19) lockdown
in India with over 91 million people losing their employment in April 2020. Over 119
million Indians lost their jobs, including entrepreneurs and salaried workers. In contrast,
agriculture saw an addition of five percent from farmers as compared to the fiscal year
2020.
 The unemployment rate around 12% at the end of May 2021 which translated into a loss
of job by 1 crore people during the period due to the 2nd wave of corona pandemic.
 The unemployment rate stands at 12.4%, urban 15.1% and rural 11.2% as of June 2021.
 Income of 97% households have declined since the outbreak of the pandemic.
 The index of actual hiring has come down from 132 in July-September, 2020 to 60 in
January-March, 2021.
 The automotive and FMCG sectors in tier-2 cities have performed poorly but the
recruitment situation in IT, Outsource, E-commerce, Pharma and Health Care sectors in
metro and tier-1 cities have been quite stable.
 The gap between the intent of hiring and the actual hiring in markets was in early
June’21 50%.
 Mobility curbs resulted in income losses because of decreased economic activity. A 10%
decline in mobility was associated with a 7.5% decline in income.

 Sectoral Analysis
The Covid-19 outbreak in India and the subsequent nationwide lockdown from March 25
altered the landscape of the country’s employment sector. With close to 10.9 million jobs
being lost across sectors, 2020 was termed the worst-ever year for the job market in India.

Among the various sectors, aviation, hospitality and travel were the worst hit due to the
lockdown. Indians were forced to stay home and these sectors either sent their employees
on ‘leave without pay’ or laid them off. However, the healthcare (due to Covid-19 related
growth) and education (e-learning) sectors saw a positive impact from the lockdown with
close to 0.4 million new jobs being created in these segments according to industry
estimates.

In total, HR consultants estimate that 1 million jobs were created in 2020, with the July-
December period seeing the highest recruitment. There is no centralised data available on
the absolute number of jobs lost or employment created in India. However, various

surveys by recruitment platforms and research agencies showed that the Unlock phase
from June 2020 led to a partial recovery, though the job market stayed volatile throughout
2020. Data from the Centre for Monitoring Indian Economy (CMIE) showed that the
unemployment rate rose sharply, to 9.1 per cent, in December 2020. This is the highest
unemployment rate since the beginning of India’s recovery from the lockdown in June.
It is also a steep increase from the 6.5 per cent unemployment rate in November. CMIE
said that the unemployment rate was seen rising steadily in the weekly estimates during
December. This research said that the main reason for rising unemployment in December
was the failure of the farm sector to absorb the influx of labour. Similarly, an outlook
survey by jobs platform Naukri showed that the hospitality and travel sectors, which were
already on a year-on-year (YoY) decline in recruitment terms from 2019 onwards, saw
steeper dips in April 2020. This was on account of the lockdown and restrictions on
movement.

 Where the jobs were lost?

Among the 10.9 million jobs that were lost, 5 million were in the travel and tourism sector
alone. The worst hit job role was of travel agents and tour guides. It is estimated that 20
million people work in the travel and tourism industry. The job roles involve sales,
marketing, planning itineraries, customer service and on-ground tour guide services. The
travel/tourism sector employees were among the worst hit because there was no safety
net in companies, including outplacement facilities or three months’ pay. Small travel
agencies started to shut down by May and employees were laid off end masse. Being a
niche sector, it was also difficult for us for look for alternative options for these workers.

Apart from travel, the restaurant and hotel industry were also badly hit. Covid-19 fears
and migration of workers led to eateries shutting down. Hotels were also forced to
retrench staff in the wake of almost ‘zero bookings’ (except quarantine facilities) in April
and May 2020. Close to 3.5 million jobs are estimated to have been lost in these two
segments. Hotels reported a 45.3 per cent decline in their revenue-per-available room in
the January to June period from a year ago. The Indian hospitality industry’s market size is
estimated to be $10 billion and it is said to employ 35 million people.

An allied industry is the automobile/transport sector, which saw several drivers of private
transport (buses, taxis) being laid off due to schools being shut and corporate employees
working from home. Close to 1 million such drivers/cleaners were out of jobs due to the
extended shift to working from home. In fact, 150,000 school bus staff lost their jobs and
haven’t yet received any financial relief as per the Bus & Car Operators Confederation of
India (BOCI) & School Bus Owners Association.

Due to the lockdown, while online grocery shopping and e-learning picked up, offline retail
suffered a blow due to malls being shut. This led to about 200,000 retail employees across
departmental stores and high-street fashion brands losing their jobs between March and
June 2020. However, once India entered the Unlock phase, the retail sector started hiring
again.

 Gigs in demand
Gigs are short-term job roles that are offered based on seasonal demand. Industry sources
say that close to 75,000 jobs are on offer on a temporary basis, led by sectors such as e-
commerce, offline retail, IT/ITeS and the financial services sector. Companies such as Ola,
Uber, Swiggy, Zomato, Flipkart and Amazon are among the large players offering gig roles.
While gig jobs are contractually supposed to be short-term, several companies either
extend the contract after every 3-6 months or absorb these workers in a permanent
position.

 Where were jobs created?

On the one hand, several thousand jobs were lost but newer roles started to emerge due
to the ‘new-normal’ of remote working. Digital interactions became more frequent, as a
result of which roles in areas such as cyber-security and data privacy, apart from IT
backend support, were in demand. Among sectors, the biggest gainer was the healthcare
sector. Health and pharma were in demand due to the pandemic and these
companies/institutions ramped up their staff strength.

Close to 270,000 jobs were created in the healthcare sector. Nurses were the most in
demand followed by in-house doctors for corporates, ENT specialists, pharmacists and
medical directors. At pharma companies, microbiologists and infectious disease experts
were the most in demand. A report by Naukri said that that medical and healthcare saw an
immediate sequential recovery of 90 percent in hiring in May 2020. Medical/healthcare
companies in search of professionals on Naukri.com include Fortis, Apollo Hospitals,
Religare, Bayer Group, Mankind Pharma and Wockhardt Hospitals, among others.

Since schools and colleges were shut and online classes were being held, EdTech
companies gained the most during 2020. Industry sources said that close to 130,000 jobs
were created in the education sector, led by online companies. Companies such as Ola,
Uber, Swiggy, Zomato, Flipkart and Amazon are among the large players offering gig roles.
Companies such as upGrad saw a big spike in the number of employees amidst the online
boom. upGrad was among the first to revoke salary cuts initiated earlier. Its employee
strength also grew to 2,000 (in November) from 600 at the beginning of the financial year.

Ed-tech start-ups have raised $4.89 billion across 377 rounds as of September 2020,
according to a report by CB Insights, a market intelligence platform. India’s Byju’s was
second (China’s Zuoyebang being first), having raised $1.5 billion from Tiger Global
Management, DST Global and Silver Lake Partners, among others.

 Impact of Labour Force Migration

When large-scale population migration occurs as a direct result of a health crisis, the
movement mostly tends to be internal, temporary and early on in the health crisis. It
generally happens to regions directly outside the immediate crisis zone, and mostly happens
because of misunderstandings and panic, including financial crisis or fear of losing job.
Whether it is economic recession or an epidemic like COVID-19, migrant workers in large
cities are forced either to stay in perilous conditions in the urban areas, or go back to their
places of origin— villages or smaller towns. Initially, they change from becoming providers
of remittance incomes to their households, to becoming dependents of these households.
The impacts are most troubling for low-income households, which are less well positioned
to cope with earnings losses during a recession, have no alternative earnings and have no
social security available. Most of these workers earn little more than a subsistence wage and
have no other means to protect their incomes if they lose their jobs.
Migrant workers constitute quite a large proportion of such a vulnerable population.
Millions of migrant workers were left unemployed. Many of the migrant workers returned
to their villages, others who could not tried their best to and many had to pay in terms of
their lives because of lack of relief measures available to them. The risk of unemployment
was particularly higher for those working in unorganised sectors, and those who do not have
written contracts, or those whose contracts were at the verge of completion.
The lockdown and the subsequent recession hit the contract workers across every industry.
On one hand, lockdowns and social distancing measures are dried up jobs and incomes, they
also disrupted agricultural production, transportation systems, and supply chains on the
other. This posed a challenge of ensuring food security and controlling already rampant
malnutrition, particularly among children. Many of these migrant workers come from the
most depressed and backward regions of the country, where there is currently little
potential for employment and education. In this way, any health or economic crises at the
destination also increase return migration to origin communities. A number of migrant
workers who left the big cities during the crisis may never return, preferring to drag out a
living on their marginal farms or find work in nearby towns. It would deprive industrial
centres such as Delhi, Gurugram, Surat and Tiruppur, Mumbai, etc. of labour for a long
period of time, resulting in temporary shortage of human resources in the industries.

 Predicted Global Recession

Due to a wide and sudden spread of COVID-19, the world economy faces the thread of a
serious recession.
 The Organization for Economic Cooperation and Development (OECD) forecasted that in
a best-case scenario, its fallout would slash global growth by half a percentage point
(Lowrey, 2020).
 Similarly, bodies such as the International Monetary Fund (IMF), the World Bank and the
Secretary General of United Nations also predicted global recession and significant
economic crisis in many countries (Business Today, 2020, April 3).
 The threat of recession is particularly important for India, as the pandemic came at a
time when the country was already facing problem of economic slowdown. Early
estimates by the government suggest that there will be a hit of 0.3–0.5 per cent on the
GDP in the next fiscal year, and growth in the first two quarters of the next fiscal could
be as low as 4–4.5 per cent (Economic Times, 2020, March 17).
 Sectors such as tourism, aviation, hospitality and trade will be severely affected, and
these sectors would be the first to face the impact.
 According to the International Monetary Fund (IMF), micro-, small- and medium sized
enterprises (MSMEs) and the services sectors are likely to be among the most affected
due to reduced consumer spending. Fitch has cut GDP growth forecast for India to 2 per
cent for the fiscal year ending March 2021, which would make it the slowest growth in
India over the past 30 years (Business Today, 2020, April 3).

 Impact of Recession on Workforce

There have been evidences in the past about how a recession affects the workforce. During
the global financial crisis of 2008–2009, an estimated 22 million people had lost their jobs,
according to the International Labour Organization (ILO). India, like many other countries of
the world, had to face recession in 2009.

A study carried out by the United Nations Development Programme (UNDP; Kumar et al.
2009) revealed some facts about how that recession impacted the migrant workers in India.
a. According to UNDP, job loss was around 40,000 for engineering, 100,000 for gems and
jewellery and 500,000 for garments. Of these, engineering job losses were spread
throughout India; the gems and jewellery ones were especially located in Gujarat; and
the garments losses were located mostly in Ludhiana and Tirupur.
b. Around 20,000 construction workers lost their jobs in the Gulf. Overall, these 184
Journal of Health Management 22(2) job losses were more in the unorganised sector.
c. The experiences of the recession of 2009 suggested that downsizing adversely affects
those who are employed in unorganised enterprises and those who are employed in
organised enterprises, but whose employment contracts are of informal nature (Kumar
et al., 2009).
Another study on the impact of recession in Kerala (Zachariah & Rajang, 2010) indicated
that
a. more than one-fifth of the emigrants returned home because they lost their jobs due to
the financial crisis, while another 3.3 per cent came because they were compulsorily
repatriated.
b. Another 11.5 per cent of the emigrants reported that they returned home because their
contract had expired and was not renewed.
c. Adding up all, the total percentage of emigrants who returned home owing to the
economic recession was around 36 per cent (about 63,000 emigrants) in the state of
Kerala.
The recession due to COVID-19 appears to be more serious than what we faced in the 2009
recession. The ILO has estimated that up to 25 million people might become unemployed
worldwide due to the impact of COVID-19, ranging between 5.3 million job losses on a ‘low
scenario’ and 24.7 million on a ‘high scenario’ (ILO, 2020). The impact may differ from
country to country.

 Impact of lockdown measures on the Informal

Economy
Informal workers have been facing substantial economic losses due to the pandemic and
subsequent lockdowns. For most of the 2 billion workers and business owners in the
informal economy, stopping work or working remotely from home is not an option. Staying
home means losing their jobs. For many, it also means losing their livelihoods. “To die from
hunger or from the virus” is the all-too-real dilemma faced by many of those earning a living
in the informal economy.
Taking into account the additional effects of sectoral risk, employment status, the size of
enterprises and different levels of lockdown measures (full, partial and weak measures),
leads to an even larger estimate of the impact of COVID-19 on informal economy workers.
This estimate suggests that almost 1.6 billion informal economy workers or 76 per cent of
informal employment worldwide are significantly impacted by the lockdown measures
and/or working in the hardest hit sectors (Figure 1).
Among informal economy workers significantly impacted by the crisis, women are over-
represented in high-risk sectors: 42 per cent work in those sectors compared to 32 per cent
of men (Figure 2). The difference by gender is the highest in upper-middle income countries,
where women are largely overrepresented in the manufacturing and wholesale/retail trade
sectors compared to men. There are at least two main reasons why such a high proportion
of informal workers is affected by lockdown measures.
The first is sectoral: the sectors in which they are largely represented are also the hardest-
hit. The second has to do with size: the majority of the 2 billion workers in the informal
economy labour as own-account workers and in small firms of less than 10 workers, which
are more vulnerable to shocks.
The impact of the crisis and lockdown-associated measures differs depending on the sector.
The largest sectors and sub-sectors in the informal economy are often those that are
directly impacted by COVID-19 and associated measures to ensure physical distancing.
Heavily impacted sectors include the wholesale/retail trade sector, which accounts for one
fourth of informal non-agricultural employment globally and one third in developing
countries, where the majority of those employed in the sector are street vendors. The
agriculture sector accounts for a large proportion of informal employment (40 per cent of
informal employment worldwide and two thirds in developing countries). Despite being
considered low-medium-risk, as many as 500 million workers in this sector are seriously
affected, unable to sell their products on urban markets.
With further increases in income inequality among workers, an even greater proportion of
informal economy workers will be left behind. Assuming a situation without any alternative
income sources, lost earnings would result in an increase in relative.

 Criminal activities on the rise

Clear evidence of the unemployment caused by the pandemic in India is the much evident
rise in criminal activities. The economic recession has pushed a lot of people into extreme
poverty and unemployment. This is also shown by a cross-national study by the United
Nations Global Pulse Initiative that draws a correlation between the changes in these
economic indicators with associated changes in recorded crime. In contemporary
societies, poor financial conditions are one of the leading causes of stress-induced crimes.
Higher levels of unemployment are often accompanied by poor working conditions,
decreased social spending by governments, and increased prices of consumer goods — as
has also been witnessed in India.

In the wake of these occurrences, there has been an alarming rise in domestic violence,
labour disputes, social security benefits and insolvency. The limited operativity of justice
systems, because of the lockdown measures, has further exacerbated the situation.

 Individual crimes
In India, the lack of jobs has pushed many people into criminal activities as unemployment
rates have grown exponentially from 7 per cent before the lockdown to a peak of 27.11
per cent in April 2020. Overall, labour force participation has also decreased from 43 per
cent in January 2020 to 40 per cent in November indicating that people have been staying
out of the job market; a problem compounded by the unemployment crisis.

A study on criminal activity analysing incidence of FIR reporting in Bihar, the state with the
lowest population to police ratio in the country, compares crime rates in the COVID-19
pre-lockdown, lockdown, and post-lockdown periods. The results show that as the
lockdown transitioned to a phased system with certain areas being classified as high
restriction red zones and others as low restriction orange and green zones — there was a
higher incidence of economically motivated crimes in the red zones attributed to the
higher number of job losses and business closures.

Apart from the financial strain, the social containment of people due to the shelter-at-
place orders brought about by the global health crisis also influences the observed
criminal misconduct of people. With more time being spent at home during the COVID-19
pandemic, there is a greater scope for crimes like domestic violence and child abuse. The
pandemic has also aggravated violence against other vulnerable societal sections such as
the LGBTQ people, the elderly, and those in deep poverty. In India, Google search
trends for “Domestic abuse” and “Domestic violence helpline” were peaking during the
initial 68-day lockdown period in which there has been an increase of 100 percent in the
calls for help and request for relief shelters in domestic violence cases during the last
week of April from the first week of March, as reported in the 2020 UN Human
Development Report. The number of reported domestic violence cases in India, which only
account for 14.3 per cent of the total cases, is also at a 10-year high.

 Organised crime
The very nature of organised crime is highly adaptable, which it has demonstrated with its
ability to extract long-term gains from crises such as the end of the Cold War or the global
economic crisis of 2009. The Financial Action Task Force (FATF), an intergovernmental
organisation committed to combating money laundering and terror financing, has recently
issued warnings about an expected rise in anti-money laundering crimes due to risks
associated with remote work and online sales. India’s National Security Advisor had said
that, “financial frauds have seen exponential increase due to greater dependence on
digital payment platforms.”. The FATF have also predicted an increase in cybercrimes.
These include ransomware by enticing anxious victims to click on links promising anti-
coronavirus remedies and exposing their devices to remote control and hacking.

Additionally, criminals have reportedly impersonated government officials or used other

phishing techniques to obtain personal or financial information, held fundraising for fake
charities helping COVID-19, and enabled fraudulent investments into fake companies
promising a cure for the novel coronavirus. Between February and March 2020, Interpol
reported a 788 per cent growth in high-risk website registrations globally, whereas a cyber
security firm reported a 600 per cent increase in phishing mails only in March 2020. It is
estimated that cybercrimes will cost the world economy US$ 6 trillion in 2021. Also, the
number of cyberattacks that originated in India had more than doubled to 2,299,682
incidents in Q1 2020 as compared to 854,782 in Q4 2019. To tackle the upward trend of
cybercrimes, Delhi Police has trained 1,300 additional personnel to manage the increasing
cyber threats.

The immense financial strain on legitimate businesses swirling towards bankruptcy in

various sectors such as tourism, manufacturing, and food presents organised crime
syndicates with the opportunity to penetrate the legal economy by gaining direct or
indirect control of failing businesses through exorbitantly expensive loans. With more
people moving their money out of the financial system due to economic uncertainty,
criminal organisations will increasingly utilise this opportunity to propagate cash-
dominated unregulated financial markets with credit lines to fund businesses while
attempting to capitalise on the plight of the unemployed and vulnerable to expand their
base and recruit new members.

There are examples of organised crime syndicates taking advantage of the shortages in
medical supplies by leveraging their existing supply chain of counterfeit products to
distribute substandard protective equipment like masks and sanitizers, jeopardising the
health of their users in Indian cities. An international operation conducted by Interpol in
2020 led to the seizure of over four million potentially dangerous pharmaceutical
products worth US$ 14 million. Additionally, fake COVID-19 vaccines are being sold on the
internet. There has also been an increase in organised property crimes during the
pandemic with the use of real estate as a front to layer illicit funds, a method popular in
the criminal underground.

 Expected employment recovery after 1st v/s 2nd

Wave
The recovery from the first Covid-19 shock of early-to-mid 2020 was V-shaped. But it is now
becoming increasingly clear that the recovery from that serious setback will not get India’s
real GDP to where it was before the shock even by the end of March 2022.
 The labor participation rate remains 2.7 percentage points lower than its pre-covid
levels.
 The employment rate remains 3.3 percentage points lower than the pre-covid levels.
 The unemployment rate shot up from 7.8 per cent in the quarter ended March’20 to
nearly 24 percent in April’20.
 Followed by 17.8 per cent in the quarter ended in June 2020. A quick recovery to 7.3 per
cent in the quarter ended September 2020.

The recovery was incomplete because the employment rate, which is the working age
population that is employed, never returned to its pre-Covid levels. The employment rate
was 39.2 per cent in the quarter ended March 2020. It fell to 31.5 per cent during the
pandemic quarter of June 2020 and recovered in the famous V-formation in the next
quarter July-September 2020 to 37.7 per cent. Then, it was unable to complete its recovery
and remained around that level till the second wave hit India in April 2021.

CPHS indicates that a V-shaped recovery is underway again after the second wave of Covid-
19 that struck India in April. According to the weekly June’21 data published:
 In January 2021, India saw an unemployment rate of over six percent. This was a
significant improvement from the previous month.
 The data shows that the employment rate was 37.6 per cent in March 2021 before the
second wave descended.
 During 2nd wave, the employment rate fell to 36.8 per cent in April’21 and then further
to 35.3 per cent in May.
 The rate fell to 33.6 per cent by the week ended May 23, 2021 and remained close to 34
for some time.
 The four weeks from May 10 through June 6 were the worst hit by the second wave. The
employment rate averaged at 34.5 per cent during this period. The recovery since that
trough has been quick.
 The Employment rate sprung back to 36.3 per cent during week ended June 13. As of the
week ended July 25, the employment rate was 38.2 per cent.
 The LPR rose to 41.1 per cent in the week ended July 25 from 40 per cent or lower in
each of the preceding three months. The steady rise of the LPR through most of July
implies a greater demand for jobs.
 The unemployment rate fell from 7.3 per cent in the week ended July 4 to 6 per cent in
the week ended July 18. As the LPR jumped to over 41 per cent in the week ended July
25, the unemployment rate shot up to 7.1 per cent.
 Had the pandemic not occurred?
Poverty would have declined by 5 percentage points in rural areas and 1.5 percentage
points in urban areas between 2019 and 2020, and 50 million would have been lifted above
this line.

 Actions that can help improve the situation:

o Improving small-scale industry segment of the economy.
o Self-employment should be given more emphasis.
o Educational pattern should be completely changed.
o Emphasis should be given on vocational education.
o Qualified engineers should start their own small units
o Decentralization of Industrial production to create employment opportunities in
underdeveloped areas .
o Accessible financial aid, raw materials and professional preparation should be made
easier.
o Improve job prospects and labor productivity.
o Education should be given more priority in five-year plans.
o Population growth should be reviewed.
o Family planning policy should be uniformly and efficiently enforced.
o Proper process to ensures efficient use of available resources.

 METHODOLOGY
The research is a literature-based study investigating the current issue of ‘Impact of COVID
on unemployment in India’. We have also relied on secondary data from various books,
journals, and authentic websites. The data (Charts, Tables and Diagrams) in the study has
been analyzed properly & included only after extensive internet study.
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